WTI: Two-day recovery loses steam near $ 68.50

• A drop in the US rigs count and Iranian sanctions led the recovery.
• But looming US-Sino trade fears and upcoming US-Russia energy meeting keeps a lid on the upside.

WTI (oil futures on NYMEX) stalled its two-day recovery in the European session, having faced fresh sellers near the midpoint of the 68 handle, as investors now await some fresh impetus for the next push higher.

The recovery gains in the barrel of WTI remains capped amid a risk-averse market environment, as ongoing US-Sino trade tensions and Emerging Markets (EM) turmoil continue to dampen the sentiment around the higher-yielding oil.

The black gold staged a solid comeback last week low of $ 66.86 mainly driven by supply disruption concerns, as the US sanctions on Iran began to bite. Further, supply risks from Venezuela and Libya also lend support to the prices.

Meanwhile, the commodity also cheers a drop in the US rigs count, as reflected by Bakers and Hughes oilfield services company’s weekly data released last Friday. The US drillers cut two oil rigs last week, bringing the total count to 860.

Attention now turns towards the US weekly fuel stocks data due later this week for near-term trading opportunities.

WTI Technical Levels

In the view of Jason Sen at DayTradeIdeas.com, “WTI Crude gains are likely to be limited with first resistance at 6800/10 & we topped exactly here on Friday. If a break higher is seen we target a selling opportunity at 6860/70. Stop above 6900. Holding below 6800 keeps the outlook negative targeting 6755/45 & the low at 6686, just above our next downside target of 6680/75. This is minor short-term Fibonacci support at so it is not a surprise that it held but is unlikely to hold for long. A break lower targets 6650, 6610/00 & perhaps as far as 6570/60.”